In its effort to limit foreign currency transactions, Argentina
had put into place capital controls. Argentines have had to fill
out applications to receive dollars for their pesos. The
government had also put into place massive taxes for citizens who
wished to spend money overseas.

All of this led to a burgeoning black market, where the exchange
rate was for Argentine pesos has been actually much substantially
more unfavorable. But the fact that Argentines were willing to
accept a huge discount for their pesos reflected how difficult it
was to go
through legal means.

Unfortunately, these growing currency black markets had made the
capital controls less effective.

On Thursday, Argentina shocked everyone by saying it had
abandoned its interventionist monetary policy, which caused the
peso to dropped
a breathtaking 13% against the dollar.

The plunging currency only added to fears that inflation would or
continue to plague the troubled country.

In it's statement today, Argentine Cabinet Chief Jorge Capitanich
said that the peso had reached an acceptable level.

According to Bloomberg, the peso is now at 7.88 per dollar. On
the black market its closer to 13 per dollar.